KARACHI: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday issued a white list of digital lending apps to serve as a reference point for Google that will list them on Play Store from May 31 to prevent the possibility of online fraud, said an official statement.
The SECP has published the name of SmartQarza as the approved app, and it is currently evaluating three other apps for final endorsement.
According to an official of the regulatory body, the issue of online fraud through unauthorized apps offering personal loan and investment was taken up by the Pakistani authorities with Google who urged the global Internet company not to allow such apps to function in Pakistan.
“We were negotiating with Google for the last couple of months, and now they have agreed that those apps which would not be licensed by the SECP will not be allowed,” said Muhammad Sajid Gondal, a spokesperson for the regulatory body, on Wednesday. “Google will review the app by May 31 this year, and all those apps that are not licensed will be taken down.”
The SECP spokesperson said that the regulatory body had identified and shared a list of 75 illegal apps on the Play Store.
“Until now, they have taken down about 40 out of those 75 apps,” Gondal said. “They are also reviewing the remaining apps. The most important component of the agreement with Google is that those apps operating outside of Pakistan will not be allowed to get access in the country.”
He expressed optimism that the move would help reduce or totally eliminate financial fraud through such illegal apps that could access users’ personal information.
“Only licensed apps will be available, and their forensic audit will be carried out to check if they have access to users’ personal data,” Gondal added.
The SECP has made it mandatory for apps to obtain cybersecurity certification from any firm approved by the Pakistan Telecommunications Authority (PTA), proving that they do not access customers’ personal data.
The SECP white list contains the names of approved apps owned by licensed Non-Banking Financial Companies (NBFCs), as well as the apps of licensed NBFCs that were operating as of December 27, 2022, and have applied for approval.
Pakistani law also mandates these apps to comply with digital lending standards, take adequate cybersecurity measures and controls to ensure confidentiality, and restrict them from accessing the user’s phone book or photo gallery.
Pakistan has become the sixth country, after India, Indonesia, Philippines, Nigeria, and Kenya, to introduce additional conditions for digital loan offering apps.
